The
three named plaintiffs brought a purported class action
alleging that the developers of their neighborhoods created
agreements that violated both state and federal law by
requiring the neighborhoods' homeowners to pay for basic
telecommunications services provided by Crystal Clear
Technologies, LLC ("Crystal Clear"), an entity
owned and controlled by the developers. The district court
dismissed the plaintiffs' federal claims for failure to
state a claim and subsequently denied as futile the
plaintiffs' motion seeking leave to file an amended
complaint. We affirm in part and reverse in part the district
court's denial of the plaintiffs' motion seeking
leave to file an amended complaint.

I.
FACTS AND PROCEDURAL HISTORY

The
plaintiffs are homeowners in three centrally-planned
neighborhoods in Thompson's Station, a small town in
Williamson County, Tennessee. The three neighborhoods,
Canterbury, Bridgemore, and Tollgate, have hundreds of houses
and over a thousand homeowners.

Carbine
& Associates, LLC, developed the neighborhoods through
affiliated companies, Bridgemore Development Group, LLC,
Tollgate Farms, LLC, and Hood Development, LLC. The
developers also established and controlled owners'
associations for the neighborhoods. However, the developers
have since transferred control of the owners'
associations to third-party entities not controlled by either
the developers or homeowners.

From
2006 to 2007, while under the developers' control, the
owners' associations each entered into communications
services agreements (the "Agreements") with Crystal
Clear. The Agreements grant Crystal Clear the right to
provide telecommunications services to the neighborhoods for
twenty-five years, with an option for Crystal Clear to
unilaterally renew for an additional twenty-five years. In
addition, the Agreements authorize Crystal Clear to be the
exclusive agent for homeowners in procuring services from any
outside providers and grant Crystal Clear the exclusive right
to market services within the neighborhoods. Under the
Agreements, homeowners must pay the owners' associations
a monthly assessment fee, which the associations then use to
pay Crystal Clear for basic telecommunications services.
Homeowners must pay the fee whether they use Crystal
Clear's services or not. In addition, homeowners must
make a one-time payment of $1, 500 to Crystal Clear for the
cost of constructing the telecommunications infrastructure in
the neighborhoods. To facilitate the infrastructure's
construction, Crystal Clear also obtained a non-exclusive
franchise agreement with Thompson's Station that
permitted Crystal Clear to use the service easements within
the neighborhoods.

Prior
to executing the Agreements, Crystal Clear had no experience
in the telecommunications-services industry. To provide
services to the neighborhoods, Crystal Clear contracts with
another provider, DirecTV, and charges a premium to
homeowners in addition to the rate negotiated with DirecTV.
Further, Crystal Clear does not provide services outside of
the neighborhoods at issue in this case.

The
plaintiffs brought this suit and subsequently filed their
first amended complaint, alleging both state and federal
claims. The plaintiffs claimed that the Agreements
constituted self-dealing, unjust enrichment,
unconscionability, unlawful tying, market allocation, and
unlawful exclusivity.

The
defendants moved to dismiss, arguing that the first amended
complaint failed to assert allegations necessary for the
federal claims and that the plaintiffs lack standing to bring
claims on behalf of the owners' associations. The
district court dismissed the first amended complaint under
Federal Rule of Civil Procedure 12(b)(6) without addressing
the standing argument and declined to exercise supplemental
jurisdiction over the remaining state-law claims.

The
plaintiffs then moved under Federal Rule of Civil Procedure
59 to alter or amend the judgment and under Rule 15 for leave
to file a second amended complaint that asserted the same
federal claims. The district court denied the plaintiffs'
motion after determining that the second amended complaint
would fail to survive a motion to dismiss and was thus
futile. The plaintiffs timely appealed from both the district
court's dismissal and its refusal to allow the second
amended complaint. However, the plaintiffs agree that the
second amended complaint reflects the plaintiffs' most
recent and developed pleading for purposes of this appeal.
Accordingly, we consider only whether the district court
erred in refusing to allow the second amended complaint under
Rule 59 and Rule 15. Furthermore, the plaintiffs challenge
only the district court's decisions regarding their tying
and exclusivity claims. Therefore, we do not address the
dismissal of the market allocation claim.

II.
ANALYSIS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
...

Our website includes the first part of the main text of the court's opinion.
To read the entire case, you must purchase the decision for download. With purchase,
you also receive any available docket numbers, case citations or footnotes, dissents
and concurrences that accompany the decision.
Docket numbers and/or citations allow you to research a case further or to use a case in a
legal proceeding. Footnotes (if any) include details of the court's decision. If the document contains a simple affirmation or denial without discussion,
there may not be additional text.

Buy This Entire Record For
$7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.